Executive Summary
- What’s new: On 30 June 2026, the FCA published a major package of final policy statements and guidance for the UK’s forthcoming cryptoasset regime, covering stablecoin capital, backing assets, redemption, interest, global liquidity pools, DeFi and MARC.
- Why it matters: The materials move the UK significantly closer to a finalised rulebook for regulated cryptoasset firms, affecting stablecoin issuers, qualifying cryptoasset trading platforms, intermediaries and international groups assessing their UK strategy.
- What to do next: Stablecoin issuers should consider building a UK-specific issuance model, CATPs and intermediaries should focus on operating model design, and international groups should assess whether the UK branch route is viable.
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On 30 June 2026, the Financial Conduct Authority (FCA) published a major package of final policy statements and guidance for the UK’s forthcoming cryptoasset regime. The materials move the UK significantly closer to a finalised rulebook for regulated cryptoasset firms.
The package has made some concessions to industry feedback on the consultation drafts, but it is not a light-touch regime. The FCA has retained the core architecture of a UK-specific, activity-based framework: Stablecoin issuers will face investment-firm-style prudential concepts adapted for crypto; qualifying cryptoasset trading platforms (QCATPs) will sit at the centre of admissions, disclosure and market abuse controls; and international firms will need to think carefully about their UK presence, booking model and access to global liquidity.
This alert focuses on areas that will be of particular interest, debate and industry engagement during the consultation phase:
- Regulatory capital requirements for stablecoins.
- Stablecoin backing assets and redemption rights and the treatment of interest and other returns on stablecoins.
- The FCA’s approach to global liquidity pools for cryptoasset trading platforms.
- The evolving position on DeFi.
- The new Market Abuse Regime for Cryptoassets (MARC).
These areas highlight immediate topics we expect to be front of mind for issuers, exchanges, intermediaries and international groups assessing their UK strategy.
1. Stablecoin Capital
The FCA has confirmed a bespoke prudential regime for cryptoasset firms, with stablecoin issuers subject to a minimum own funds requirement driven by the higher of the permanent minimum requirement, the fixed overheads requirement or applicable K-factor requirements. For issuers of qualifying stablecoins, the permanent minimum requirement is £350,000.
The most important stablecoin-specific point is the K-SII requirement. The FCA has reduced the proposed K-SII coefficient from 2% to 1%, reflecting feedback that the consultation calibration overstated operational risk when viewed alongside the stablecoin backing, trust, reconciliation, redemption and custody requirements. K-SII will be calculated by reference to the average qualifying stablecoins that the UK issuer is liable to redeem, using the lookback methodology set out in the final rules.
This is a notable departure from MiCA, whose issuance-based capital requirement limb requires 2% of the average amount of reserve asset to be held as capital. The FCA expressly rejects a straight read-across from MiCA, noting that MiCA does not use an equivalent K-factor architecture and that headline comparisons are not like-for-like. In practice, groups operating under MiCA should not assume that their EU capital model will map neatly onto the UK regime.
The capital package also sits alongside issuer-specific liquidity requirements. Stablecoin issuers will have a sectoral liquid assets requirement, including an issuer liquid assets requirement calculated by reference to backing assets, with on-demand deposits excluded and charges applying to other eligible assets. This means the UK regime should be analysed as a combined capital, reserve, liquidity and operational resilience framework, rather than a pure reserve-backing model.
2. Backing Assets and Redemption
The FCA has broadly maintained the range of eligible backing assets consulted on. Issuers must hold the backing pool on a statutory trust for tokenholders, segregated from the issuer’s own assets, and the value of the pool must be equal to the reference value multiplied by the number of stablecoins in issue. At least 5% of the backing pool must be held in on-demand deposits.
The FCA has not expanded eligibility to all of the assets that the industry sought. However, it has confirmed that issuers may use a defined category of “expanded backing assets,” including certain long-term government debt instruments, public debt CNAV MMF units and short-dated repo/reverse repo arrangements, subject to conditions. It has also confirmed that tokenised versions of eligible backing assets are not prohibited, provided the relevant CASS and custody requirements are met.
Redemption remains deliberately robust. Issuers must provide tokenholders with a right to redeem at par and must complete redemption as soon as practicable and, in general, by the end of the business day following receipt of the stablecoin. However, this time period now starts from when an issuer received the stablecoin into its wallet for redemption, allowing it time to complete AML/KYC checks. The FCA has stuck with a T+1 maximum time period, rather than 24 hours provided for by the Bank of England in its policy statement on systemic stablecoins.
The FCA has rejected structures that would make redemption subject to minimum quantities or onerous conditions. Suspension is permitted only in exceptional circumstances, such as serious DLT/system failures, sudden loss of confidence causing exceptionally high redemptions, or insolvency-related scenarios. The FCA has simplified the backing-asset composition requirement. Where an issuer uses expanded backing assets, the core backing-asset requirement will be the higher of 5% of the backing pool and the highest daily redemption percentage over the previous 180 redemption days, with the on-demand deposit requirement sitting alongside that calculation.
3. Stablecoin Interest
The FCA has maintained its prohibition on paying interest or income generated from the backing asset pool to stablecoin holders, whether directly or indirectly. The policy rationale is clear: Qualifying stablecoins are intended to be money-like instruments for payment and settlement use cases, not investment or yield-bearing products.
There is, however, an important distinction between prohibited backing-asset yield and other forms of commercial reward. The FCA has indicated that issuers may pay rewards from their own account, for example based on use or transaction volume, provided those rewards are not funded by or linked to income from the backing pool. The FCA says it will do further work on the competition and economic implications of permitting interest, but it also makes clear that this should not be read as signalling a change in position.
For issuers, this is likely to be one of the most commercially significant outcomes, and we expect the approach to rewards to be welcomed by issuers. Business models that rely on sharing reserve yield with users will need to be restructured for the UK, while rewards, rebates and incentive programmes will need careful legal and operational separation from backing-asset income.
4. CATPs, Global Liquidity Pools and Equivalence
The FCA has provided more clarity on how UK-authorised qualifying cryptoasset trading platforms may interact with global liquidity. The final rules preserve the core execution venue requirement: Where retail clients or elective professional clients are involved, relevant orders must be executed on a UK-authorised execution venue. Arrangers must take reasonable steps to ensure that their arrangements result in execution on a UK-authorised venue, and principal dealers cannot use their authorised position as a simple pass-through to an unauthorised same-group overseas platform.
That said, the FCA recognises that access to global liquidity can produce better execution and better customer outcomes. The international firms guidance contemplates a branch model for overseas QCATP operators in appropriate cases, particularly where authorising a UK branch allows UK client orders to interact with a global liquidity pool and avoids fragmentation across legal entities. The FCA’s example model contemplates a UK branch for central QCATP functions, with a UK legal entity potentially used for other activities such as safeguarding.
This should not be confused with an equivalence or recognition regime. The FCA states that it is not currently in a position to provide formal equivalence or recognition for overseas platforms. Instead, overseas firms seeking to operate through a UK branch will need to satisfy the FCA on matters including the adequacy of home state supervision and comparable protections, assessed case by case.
A further practical point is timing. The FCA intends to consult on a deferral mechanism for execution venue requirements, with a possible three-month extension to January 2028. That will be important for global exchanges whose UK and non-UK liquidity architecture cannot be re-papered quickly.
5. DeFi
The FCA has not carved decentralised finance (DeFi) out of the regime wholesale. Its position remains that where there are clearly identifiable controlling persons carrying on regulated activities by way of business, the rules can apply. By contrast, genuinely decentralised arrangements with no person undertaking a regulated activity by way of business remain outside scope of the new UK rules. The analysis will need to be undertaken on a case-by-case basis.
The more difficult questions have effectively been deferred. The FCA intends to consult separately on DeFi guidance, including indicators of decentralisation and how the rules should interact with DeFi business models, operational resilience and financial crime risks. For DeFi projects, foundations, governance participants and front-end operators, the immediate task is therefore to map control, governance rights, revenue flows and operational dependencies against the regulated activities perimeter.
6. Market Abuse Regime
The FCA has finalised MARC as part of the admissions and disclosures package. MARC prohibits insider dealing, unlawful disclosure of inside information and market manipulation in relation to qualifying cryptoassets admitted, or seeking admission, to trading on a UK QCATP. The prohibitions can apply regardless of whether the relevant behaviour takes place in the UK or overseas.
MARC is deliberately not a copy-out of UK MAR. It is adapted for crypto-specific features, including cryptoassets with no traditional issuer, decentralised assets and on-chain activity. It also places a materially greater first-line role on QCATPs and intermediaries than exists in traditional securities markets, including an obligation to “disrupt” marketing abuse when detected.
Key elements include inside information disclosure obligations, delayed disclosure where conditions are met, systems and controls to detect and prevent market abuse, personal account dealing controls, information barriers, training, record-keeping, contractual rights to take action against users and powers to halt or restrict trading. Larger QCATPs will also be subject to additional obligations, including cross-platform information sharing and on-chain monitoring; however, the FCA has confirmed that on-chain monitoring can be limited to wallets that are “linked” to their platform.
The FCA has retained a £10 million revenue threshold for the additional large-QCATP requirements, stating that this captures approximately 95% of the current market by revenue while avoiding disproportionate burdens on smaller firms. The FCA confirmed that it will not make itself the central market-abuse reporting hub. Instead, intermediary notifications will be made to UK QCATPs rather than directly to the FCA; in addition, cross-platform information-sharing obligations in respect of suspicious transactions have been retained for large QCATPs. The FCA is not prescribing common data formats at this stage.
What Should Firms Do Now?
For stablecoin issuers, the priority is to build a UK-specific issuance model. That means modelling capital under the permanent minimum, fixed overheads and new K-factor requirement; testing the backing pool against eligible asset, custody, statutory trust and reconciliation requirements; and confirming that redemption can be operationally delivered on a T+1 basis. Any yield, rewards or incentive programme should be reviewed to ensure that it does not amount to prohibited pass-through of backing-asset income.
For CATPs and intermediaries, the immediate focus should be operating model design. Firms should consider identifying which legal entity or branch will operate the UK QCATP, how UK client orders will access liquidity, whether the firm can justify a global liquidity pool model, and how execution venue restrictions will apply to retail and elective professional client flows. Firms can also begin building the surveillance, escalation, information-sharing and user-control framework required under MARC.
For international groups, the FCA’s guidance is helpful but conditional. The UK branch route may be viable for some global platforms, but it is not an offshore passport. Firms will need to evidence why the branch model produces better customer outcomes, how UK supervision will work in practice, and whether home state regulation provides comparable protections.
For DeFi projects and groups exposed to DeFi, the final rules do not remove perimeter risk. The key question is still whether there are persons with sufficient control or involvement to be treated as carrying on regulated activities. Until the FCA’s DeFi guidance is published, governance and control analysis will remain central.
This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.